Can Bitcoin be used for money laundering?

Chamber of Deputies has set up a Committee of Jurists to examine the issue

The House of Representatives initiated at the end of September a commission with 19 jurists to present a draft bill that modifies the current Money Laundering Law. The measure may indirectly impact the cryptomoeda market, since Bitcoin Era may be being used for this purpose as well.

Dario Messer, an investigator at the Lava Jato operation in Rio de Janeiro, said last month in an award-winning indictment that there are money laundering schemes involving the use of cryptomorphs.

In his statement, Messer said that the doleiros now compete with young people of broad domain with computers and that they operate often outside Brazil.

In less than a month after that episode, the president of the House of Representatives, Rodrigo Maia, decided to install a commission with jurists, academics and law researchers which will be coordinated by the minister of the Superior Court of Justice (STJ) Reynaldo Soares da Fonseca.
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Fonseca, in an interview with Radio Câmara, said that money laundering was a new crime and that before there was only the law that dealt with crime against the financial system.

According to the minister, the crime of money laundering consists in „the process of hiding the origin of irregularly obtained money to hide it within legitimate economic activity.

Money laundering with bitcoin

On this point, the criminal lawyer Fernando Henrique Cardoso, a partner in the law firm Cardoso, Siqueira e Linhares, explained that money is laundered not only with cryptomorphs, but with anything. Cryptomorphs, however, bring an ease in hiding assets.

„Since there is no regulatory agency on digital assets, there is an ease in making these assets untraceable. Unlike the money bill, cryptomoeda has facilities such as sending to various parts of the world and in an agile way, which helps to facilitate the concealment of the origin of goods.

According to the STJ minister, who will coordinate the commission for the draft, this type of crime „involves drug trafficking, extortion and corruption crime and covers R$ 6 billion in Brazil and R$ 1 trillion in the world.

Fonseca mentioned that, according to the UN (United Nations Organization), the world’s cyber crimes involve US$ 720 billion, which already shows the effects of technology in favor of crime.

Federal Revenue Solution

Marcio Ávila, professor of International Tax Law at the Universidade Federal Fluminense (Uff) explained that „the fight against this crime, especially when practiced with the use of cryptomorphs, depends on the broad access to information,“ since Law 9.613/98 (Law of money laundering in force) brings that this crime occurs with the concealment of the origin or location of the asset.

Ávila mentioned that the Federal Revenue Service in Brazil (RFB) took a step forward when it instituted IN 1.888/19, by which it disciplined „the obligation to provide information related to operations carried out with cryptoactives to the Special Secretariat of the Federal Revenue Service of Brazil.

He explained that with this information, the IRS, faced with the suspicion of a crime of money laundering, could communicate the fact to the Federal Public Ministry.

„Art. 11 of the IN is clear in determining that communication to the Federal Public Prosecutor’s Office may be formalized when there is evidence of a money laundering crime“.

The STJ minister had said that the Commission should technically analyze whether the current law in force dealing with money laundering needs to be reviewed without any pretence of change.

Cardoso believes the Commission should analyze whether the law has fulfilled its role in the field of prevention. The risk to the cryptomaniac market from his point of view will only be of greater regulation.

„What it may have is a series of regulations on places that market cryptomoquids to adopt stronger money laundering prevention policies. This will be to attest to Coaf for example that the market follows the care to avoid this type of risk“.

Ávila said that the IRS, with the Normative Instruction adopted, „is in line with the international standards of taxation of the OECD“ by charging more transparency in operations with cryptomoeda. He said that this is „one of the pillars of the Erosion and Profit Shifting Base (BEPS) of the OECD – which also has Action Plan No. 1 on the digital economy and whose item 3.2.2 deals with virtual currencies“.